Extended Warranty To The Rescue?
Robert is in a spot to save some money through an extended warranty ... or so he thinks.
QUESTION: Robert bought an 8-year-old Honda on Friday. The car is now messing up on him and it will cost $3,000 to fix. It’s under warranty and he can still buy an extended warranty for $1,500. That would give him another 3 years or 36,000 miles. Should he take that?
ANSWER: If they cover your car and your repair with this car warranty, you think it will save you money. If your theory is right, the car extended warranty people are idiots. They are issuing a warranty that, on average, they will lose money on. You’ll pay them $1,500 to give them the opportunity to give you $3,000 for a repair. This product is costing them more than they make. I can’t believe that the car company would be stupid to do that. Whoever will cover this does warranty breakdowns on cars. It might be easy to assume that they know this car breaks down. It’s either not covered or you’ll find that the cost of the warranty is high enough to cover the repair, or they are losing money every time they issue one of these warranties. I’m self-insuring through this.